R.R. Donnelley Q2 Profit Tops View, Backs 2013 Revenue Outlook

(RTTNews) - Print and related services provider R.R. Donnelley & Sons Co. (RRD) reported Monday a profit for the second quarter that declined from last year, hurt by higher restructuring and impairment charges as well as lower international sales. Stripping down the charges, adjusted earnings per share for the quarter topped analysts' expectations. The company also maintained its revenue guidance for the full-year 2013.

"We are pleased with our results, as the revenue trend continued to improve during the second quarter. The year-over-year change in organic revenue is the best we've experienced in the last seven quarters, and represents a 40 basis-point improvement from the first-quarter change," President and CEO Thomas Quinlan III said in a statement.

The Chicago, Illinois-based company reported net income of $65.4 million or $0.36 per share for the second quarter, lower than $88.8 million or $0.49 per share in the prior-year quarter.

The results for the latest quarter include net $0.09 per share of primarily restructuring, impairment and acquisition related charges.

Excluding one-time items, adjusted earnings for the quarter was $82.5 million or $0.45 per share, compared to $88.5 million or $0.49 per share in the year-ago quarter.

On average, five analysts polled by Thomson Reuters expected the company to report earnings of $0.42 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter improved 1.7 percent to $2.57 billion from $2.53 billion in the same quarter last year, reflecting the impact of 2012 acquisitions and volume growth in the U.S. print and related services segment. Wall Street analysts had a consensus revenue estimate of $2.50 billion for the quarter. Meanwhile, organic sales declined 0.8 percent.

Net sales for the U.S. print and related services grew 2.4 percent from the prior-year quarter to $1.89 billion, while international net sales edged down 0.3 percent to $680.8 million from last year.

Operating margin for the quarter improved 20 basis points to 6.7 percent from last year's 6.5 percent as selling, general and administrative expenses as a percentage of total net sales declined 50 basis points, partially offset by a 20 basis points decline in gross margin.

Looking ahead to fiscal 2013, the company reaffirmed its revenue guidance in the range of $10.1 billion to $10.3 billion. Street is currently looking for full-year 2013 revenues of $10.22 billion.

"In addition, we continued to invest in the business, at the same time improving free cash flow by over $90 million from the same quarter last year. We remain on track to deliver our full-year guidance, including free cash flow in the range of $400 million to $500 million, that will allow us to migrate toward our targeted gross leverage range of 2.25x to 2.75x on a long-term sustainable basis," Quinlan added.

RRD closed Monday's regular trading session at $16.25, up $0.50 or 3.17% on a volume of 4.56 million shares. The stock gained a further $0.64 or 3.94% in after-hours trading.